Staffing Exposures Privacy and Cyber Liability Insurance

As your business technology accumulates personal data, whether it is social security numbers, addresses or credit card information, you become increasingly at risk. According to a 2010 MacWorld report, cyber crime, including Web attacks, malicious code and private information theft, costs an organization an average of $3.8 million per year and results in about one successful attack each week.

The vast majority of staffing companies keep private and personal information on their computer systems that easily identify customers or employees. If this sensitive data falls into the wrong hands via a network security breach, it can lead to fraud, identity theft or similar cyber crimes. These security breaches can happen either accidentally or through employee misconduct.

Common Risks

Hackers, Attackers and IntrudersThese terms are applied to people who seek to exploit weaknesses in software and computer systems for their personal gain. Although their intentions are sometimes benign, their actions are typically in violation of the intended use of the systems that they are exploiting.

Social MediaThe intensified use of social media and interactive websites is another large risk in which divulging private information and slander can be exposed accidentally or intentionally by employees. Staffing companies with posting capabilities allow individuals to converse with one another quickly via the internet. Should one of your employees post defamatory or private information about a client, another employee or the company, this could be devastating to your business.

Privacy and Cyber Liability Insurance

Privacy Insurance policies are incredibly important because traditional insurance does not cover losses via the World Wide Web. If you are a store owner and someone breaks in and physically damages several of your computers, your property coverage will cover the damages. However, if someone from a distant location manipulates your firewall protection and gains remote access to your server and then deletes, alters or steals data pertinent to running your staffing business, you are not covered under general liability or property damage insurance.

Insurance cant prevent a security breach from occurring, but it can ease some of the financial burden. The primary components of Technology Related Coverage or Cyber Liability policies are:

Privacy Liability: coverage for liability arising out of ones right to privacy

Safeguard personal information within the workplace, segregating pay information and personal details on a separate part of the network and restrict access to staff on a privilege basis

Implement regular staff training on security procedures

Have a crisis management plan in place

Investigate a companys security practices before outsourcing any business functions, such as payroll, web hosting or data processing

Have an insurance policy in place to cover this type of liability

ABOUT THE AUTHOR

Diane Poljak

Diane Poljak is a member of Assurance’s Senior Management Team and is responsible for overseeing the Staffing & PEO Practice. With over 20 years of industry experience, Diane is responsible for the overall vision and strategy of the Staffing & PEO Team. She serves a key role in advising the company’s risk consultants as well as creating and maintaining strategic relationships with insurance carriers and other vendor partners. Diane graduated from Butler University with a degree in Marketing. She also possesses an Associate in Risk Management (ARM) designation and is an active member of multiple trade associations, including the American Staffing Association (ASA).

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